Cardinal Health Blocked From Shipping Painkiller in Florida

By Tom Schoenberg -
Feb 29, 2012

Cardinal Health Inc. was blocked
from shipping controlled substances from its distribution center
in Lakeland, Florida, as a judge lifted an order barring a U.S.
Drug Enforcement Administration suspension.

U.S. District Judge Reggie Walton in Washington today said
the government produced enough evidence to show that the
distribution facility posed a public safety threat by shipping
heavy volumes of the prescription painkiller oxycodone to
pharmacies, including two owned by a unit of CVS Caremark Corp. (CVS)

“The government has a particular interest in ensuring that
the public is not harmed by these types of dangerous
substances,” said Walton, ruling from the bench after a two-
hour hearing.

An investigation by the DEA found the company’s Lakeland
facility shipped a “staggering” amount of oxycodone to four
retail customers in the state between October 2008 and December
2011, according to documents the agency filed earlier this month
in the case.

“All orders for controlled substances for retail pharmacy
customers must be discontinued effective immediately, unless the
order has already been picked and put on a truck for delivery,”
Walton said in a brief order issued after the hearing.

He said Cardinal may continue to fill orders for controlled
substances for all non-retail customers until 6 p.m. tomorrow.
The company may also transfer its controlled substance inventory
from the Lakeland facility to other Cardinal distribution
centers, according to the order.

Shipping Suspended

The DEA said it suspended the distribution facility’s
authority to ship controlled substances on Feb. 2 after
determining continued operations posed an imminent danger to the
public, the agency said.

Cardinal sued after a suspension order was issued and won a
temporary restraining order from Walton that was extended to
today.

The company, based in Dublin, Ohio, said the suspension is
unwarranted because it already stopped distributing controlled
substances to two of the retailers. Randolph Moss, a lawyer for
Cardinal, told the judge today that the company has no control
over doctors who write “bad prescriptions.”

“Shutting down the Cardinal Health facility doesn’t do
anything to curb that immediate threat,” Moss, a partner at
Wilmer Cutler Pickering Hale and Dorr LLP, said.

Debbie Mitchell, a spokeswoman for Cardinal Health, said
the company has filed a notice of appeal with the court.

Cardinal said in an e-mailed statement that “contingency
plans will be immediately activated” and the company will try
to ensure that customers’ needs are met “with minimal
disruption.”

‘Red Flags’

Last year Cardinal shipped enough oxycodone to pharmacies
in Sanford, Florida, that could supply a population eight times
its size, Clifford Reeves, a Justice Department lawyer, said
today. Sanford has a population of 53,000 and the supply would
support 400,000, he said.

“There’s no data than can explain those kinds of red flags
that went ignored by Lakeland,” Reeves said.

The DEA said in its court filing that the Lakeland facility
shipped about 50 times as much oxycodone to the four customers
than the average Florida pharmacy received from Cardinal. The
company repeatedly filled orders that exceeded volume thresholds
that it set, and orders flagged by Cardinal as suspicious were
released with little or no explanation why, the DEA said.

‘First Line of Defense’

Cardinal in 2008 agreed to pay $34 million in civil
penalties to settle allegations that it failed to report
suspicious orders of hydrocodone. The fine ended a 10-month
suspension of the Lakeland facility and two others in New Jersey
and Washington.

Reeves told the judge today that $16 million of that fine
related to violations by the Lakeland facility.

“They are the agency’s first line of defense,” Reeves
said. “They’re supposed to be proactive by auditing the
stories. That’s how they’re supposed to police issues like
this.”

“We work hard to actively prevent drug diversion and have
spent millions of dollars to build a system of advanced
analytics and on anti-diversion specialists,” Cardinal said in
an e-mailed statement. “We have stopped distributing to
hundreds of pharmacies determined to pose an unreasonable risk
of diversion.”

“The majority” of the pharmacies cut off by Cardinal
still retain DEA registrations to dispense controlled medicines,
the company said in the statement.